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Investment Ready: 4 Things to Look for in a Real Estate Deal

Finding a great real estate deal means checking up on almost every possible aspect of a property. If you know what you’re looking for, you can find the hidden gems that exist in almost every property market. Here are four things you should be looking for in a great real estate deal.

Good Location

One thing you should keep in mind whenever you look at a property is its location. If a house is close to dining, shopping and schools, it is much more likely to be profitable than one that doesn’t have easy access to such amenities. You should also look at the neighborhood in general, as few buyers or tenants want to move into higher-crime areas.

Positive Price History

If you’re buying a property with the intention of rehabilitating it, it’s useful to know what the house sold for when it may have been in better condition. This is one of the many ways that working with a good real estate agent can help you in your investing career. Your agent should be able to gather up the prices paid during the most recent sales of the house for you so that you can get a better picture of what it’s worth after rehabilitation.

Decent Plumbing and Electrical Wiring

Needing to replace floors or update kitchens falls well within the scope of normal real estate renovation, but major changes, such as new plumbing and wiring, tend to drive the cost of a deal up too high. Look for properties with cosmetic problems that would drive down the price, but which are basically solid in terms of their structures and essential utilities.

A Large Enough Profit Margin to Account for Unexpected Expenses

Going into a real estate deal, you should have a basic idea of what you expect to make out of it. However, there should be a large enough margin built into the deal for it to remain profitable even if the costs exceed your expectations. This is why you should always target a profit of 10 percent or more on a given real estate deal. Even if you miss the mark by a percentage point or two, you’ll still come out well ahead on your investment.

Work with a real estate agent like The Boutwell Team or someone similar to help you find your ideal location. By looking for these things in a prospective real estate deal, you can help yourself be more successful in picking properties. If you can find a property that is within your budget range and has all of the above attributes, there’s a good chance you’ve found a decent deal.

Kara Masterson is a freelance writer from West Jordan, Utah. She graduated from the University of Utah and enjoys writing and spending time with her dog, Max. Kara is the youngest of four. She has two hilarious brothers and one beautiful sister. She also is the aunt of 4 crazy little girls that she loves more than anything!! Kara is not yet able to be a mom, but she loves being around kids and being like a second mom to her nieces. She dreams of the day that she can start her own little family.